Ron Cohen: Cal Am 'progress report' sails over a few facts

While it is good to get an update on the status of the desal project (Herald, March 1) from Rob MacLean, Cal Am president, much that was said deserves another perspective from the citizen ratepayers' point of view.

Naturally, we are all very happy that progress is being made. A new water supply is critical to the Peninsula's survival, but Mr. MacLean's perspective smoothly sails over a number of facts that also matter.

Mr. MacLean starts by citing a list of projects and how these converging costs have contributed to all the rate increases (which he dismisses as "reality"). He then takes a moment to remind us that "It is important to remember these costs will exist regardless of who owns the water system."

Of course, he fails to mention several relevant "realities" specific to Cal Am and its management of the water system.

For example, costs will vary widely depending upon who is doing the financing. With Cal Am investing $86 million in the (larger) desal, we will all be paying $160 million more (net present value $115 million) than if it were a public agency building the desal! It is hardly a "regardless of who owns it" situation. That represents two full years of free water for everyone.

Mr. MacLean laments how surprising it is after almost 20 years that there is no new water supply, adding, "After many false starts, the solution is in sight."

Whoa, let's back up. Those many "false starts" he glides over with practiced ease were Cal Am's. And all those false starts have already cost ratepayers over $35 million and could easily rise to $70 million by the time all their obligations are cleared. By the way, the cost to Cal Am's investors was zero!

Speaking of exorbitant costs, Mr. MacLean never mentions Cal Am's role in increasing the cost of the San Clemente Dam Removal project. How they lobbied the CPUC to increase Cal Am's recovery from ratepayers. How the project costs exploded from $76 million to $152 million. It's funny how the Cal Am-CPUC partnership continues to cost us so much. Are Cal Am's investors paying anything? Of course not!

Mr. MacLean goes on to cite additional progress, with help from various public officials and the city of Marina. In fact, this project would not be this far along without the mayors' water authority advocating for lower costs and transparency, and the Monterey Peninsula Water Management District for building the critical funding model that can save us millions.

Public Water Now supports these efforts, but wishes to note that a public agency would have done all of these as a normal course of business and automatically been entitled to all the low financing costs that the mayors' agreement proposes (which awaits legislation and adequate state funding).

Mr. MacLean then writes, "Recently, the city of Marina took action enabling us to move forward drilling boreholes which will provide information that is needed to the feeder wells for the desalination plant."

What we'd like to know is why Cal Am took so long to file for a permit. Cal Am has been seriously interested in this area since 2009. For quite some time Cal Am could have filed for a development permit, but inexplicably did not. Instead, in October it pursued the controversial surface mining permit in a full crisis mode. Is this intentional or incredibly poor project management? Ironically, we have just been informed that water sample analysis will take another six months, further delaying the project.

As we see it, Cal Am basically used the "progress report" as a megaphone for its opinion of itself. With the pending election in June, every word it speaks is carefully orchestrated by their recently hired political consulting firm (including the glossy "we care" pamphlets filling our mail boxes and inboxes).

While that is their right, it is our right to inform the public of other choices regarding our most essential resource: water. Since a clear difference of opinion exists, we suggest that Cal Am itself (not their front groups) debate the issues with Public Water Now. Since the League of Women Voters debate, Cal Am has refused all face-to-face invitations with Public Water Now. You should ask yourself why.

For more information and/or to read a complete copy of the initiative, please see PublicWaterNow.org.